The condo market on Cape Cod has been very slow, but there is clear evidence that if a unit is in good condition and is priced right, it will sell.
A case in point is a closing that took place yesterday. When I was meeting with the seller about listing her beautiful condo, the seller had a price in mind that was considerably above the fair market value that I had determined. I suggested that she have an appraisal done so that we would have an independent third party’s view of the property value. Another good reason to have an appraisal done is that there will be a day of reckoning when the bank appraisal is conducted after the home is under contract. No matter how much the prospective buyer loves the home, if the home does not “appraise,” there is no sale.
After the appraisal came in, the seller listed the home and priced it accordingly. The condo sold in 63 days at the appraised value to a couple who had been scouting the market for over two years. They knew that the home was priced right and was a good value in this market.
We received news on Friday that at least one local Cape Cod lender, Cape Cod Five, is reinstituting 90% loans for second home buyers. (NOTE: Contact Meryl Watson for details: firstname.lastname@example.org). This was made possible because no title insurance companies would insure more than 80% loans but now at least one company is willing to offer the coverage.
95% Financing is Available for Cape Cod Condos
What does this mean?
Since the absorption rate for condo sales in a balanced market is usually around 5 months, a 20 month absorption rate means that the number of condos available exceeds the number of potential buyers. This would indicate that buyers still have the advantage in negotiating sales prices and conditions.
The National Association of Realtors has released its second quarter sales results for Cape Cod condos. The good news is that lower prices and attractive interest rates have increased affordability for both year-round and second Cape Cod home buyers. Click the link below to see the survey.
NAR Second Quarter Condo Sales Results
Until next time,
The downward pressure on the sales prices of Cape Condos continues as the challenges of getting financing continue.
The very same condo that I mentioned in May had a new buyer and a new lender and fell apart again at the last minute. This time it was about the buyer’s income. Needless to say, the bank (in this case Citizens Bank) had preapproved the buyer, received all the information requested in a timely manner, and gave no indication of a problem until the day of the final commitment when they issued a “declination letter.”
Another condo in a very well managed, well funded complex that has never had a special assessment, is under agreement with a strong buyer. The buyer is putting 20% down. Yesterday, the date of the final commitment, the lender (Provident) could not meet the original commitment date because their underwriters are backed up. The commitment is now due next week. Stay tuned.
You Can Buy A Cape Cod Condo At A Great Price
Needless to say, this continues the downward pressure on condo prices because buyers are reluctant to get involved.
On the bright side, however, I do have a closing today on a very nice Cape Cod condo. Bank of America is providing the financing for this one.
Until next time,
We recently had the sale of a condo at Sea Oaks in Mashpee, MA fall apart over the condo association’s refusal to answer four questions that required an opinion or judgement.
Working With Cape Cod Home Buyers
The mortgage provider had sent a form to the association’s management company, American Properties Team of Woburn, MA. American Properties provided a comprehensive form of their own that provided in-depth information but failed to answer four questions. Neither the lender nor APT would budge.
What an Expert Cape Cod Real Estate Agent Can Do For You
There are several questions that I am attempting to get answered:
1. Can a condo be purchased with an FHA backed loan at a property managed by APT or any association whose attorneys refuse to allow them to answer questions requiring an opinion? (i.e. Is the maintenance reserve adequate?)
2. Do all lenders use the same form?
3. Which lenders will accept the pre-prepared form provided by the association?
I will keep you updated.
Until next time,